The Future of Transportation

The Supply Chain Quarterly features an article by MIT’s Chris Caplice on the future of transportation. It can be found here: http://bit.ly/15n91D8. The four  main points of the article are:

Natural Gas will slow fuel inflation.  My research based on publications I have read is that fuel cost savings on large tractor trailer, class 8 trucks is about 20%. with payback for extra cost of natural gas engines being covered in two years.  As these engines become more common they will undoubtedly command less of a premium over diesel engines. Many truck lines are hesitate to spend the capital costs for natural gas engines but I believe the market will force changes particularly for local delivering sooner rather than later. Mr. Caplice wonders if this will slow to switch from truck to intermodal. I suspect that if the cost savings are there for rail, they would switch to natural gas also, than it will be slower than trucks whose capital costs are spread over many owners.

The Panama Canal expansion will not affect containers anywhere near as much as bulk sourcing. Larger bulk vessels going through the canal may create new markets for products, particularly those bulk products originating in South America

The growth of rail movements from interior China to Europe. Mr Capline points to growth of manufacturing in western China. There is infrastructure in place to ship rail from these areas, almost better than shipping within China to the congested East. This coordinator which goes through Russia will be of increasing importance.

Lastly the changes in software. Cloud computing will open new data analysis and operational functions to smaller shippers.  One area of future growth will be in data visibility not so much in being able to see the data, but in making sense of the massive amount of numbers.

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